FUNDEC: Mozambique Creates More Jobs, but Productivity Remains Low

The figures are contained in the Employment and Productivity Index, presented on Friday in Maputo by the Foundation for Business Competitiveness, FUNDEC.

The report was presented by Ivania Matisse, a FUNDEC technical officer, and shows that the index reached 30.37 points out of 100 in the second quarter, compared with 28.01 points in the previous period.

Despite the improvement, the result keeps the country in the CCC category, corresponding to a performance considered very weak and associated with very high risk.

During the presentation, Ivania Matisse stressed that an increase in employment alone does not necessarily mean an improvement in the economy’s productive capacity.

“Mozambique’s challenge is not only to create more jobs, but to create productive jobs,” she said.

The data indicate that the number of jobs considered in the index rose from 33,469 in the first quarter to 73,948 in the second, an increase of 40,479.

However, FUNDEC considers that the country continues to face difficulties in turning greater participation in the labour market into more productive, better-paid jobs capable of generating greater economic value.

At the same time, the number of unemployed people also increased, rising from 203,528 to 212,303, an increase of 4.3% compared with the previous quarter.

According to FUNDEC, these figures show that the economy is still unable to absorb the labour force at the required pace.

Female participation was the best-performing indicator during the period. Even so, the institution warns that women’s participation in economic activity needs to be accompanied by better incomes, greater job formalisation and more opportunities for professional advancement.

Productivity per worker remains very low and, according to the study, is one of the main constraints facing Mozambique’s labour market.

FUNDEC links the weak performance to limitations in investment, technology adoption, worker skills and business efficiency.

Hourly productivity also remains low, in a context marked by inefficient production processes and limited levels of digitalisation.

The report also identifies insufficient job creation, low labour productivity, high levels of informality, a mismatch between training and business needs, the geographical concentration of jobs and investment, the fragility of small and medium-sized enterprises and low technological adoption as major challenges.

To reverse the situation, FUNDEC proposes the creation of a National Productivity Strategy, greater digitalisation of companies, stronger vocational training, incentives for formal employment and closer links between large projects, local businesses and national value chains.

The institution also calls for greater investment in sectors with the capacity to create jobs, including agro-industry, manufacturing, tourism, the digital economy, renewable energy, logistics and construction.

In its conclusion, FUNDEC argues that Mozambique needs to go beyond simply creating jobs and focus on the ability of each job to generate income, productivity and value for the economy.